Aqua Metals, Inc.

Good day and thank you for standing by and welcome to the Aqua Metals second quarter financial results. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand conference over to your speaker today, Glenn Axelrod. Please go ahead.

Thank you, operator. Welcome to the AquaMetals second quarter 2021 conference call. Earlier today, AquaMetals released financial results for the quarter ended June 30th, 2021. This release is available on the investor section of the company's website at www.aquametals.com. Joining us for today's call for management is Steve Cotton, President and CEO, as well as Judd Merrill, the company's Chief Financial Officer. During today's call, management will be making forward-looking statements. Please refer to the company's report on Form 10Q filed today, July 29th, for a summary of the forward-looking statements and the risks, uncertainties, and other factors that could cause actual results to differ materially from those forward-looking statements. AquaMetals cautions investors not to place undue reliance on any forward-looking statements. The company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law. As a reminder, after Steve's and Judd's formal remarks... will be taking questions. Questions will be accepted over the telephone from analysts, and all other investors can submit a question using the online webinar portal provided in today's and last week's press release. We will take as many questions as we can in our available time slot. And with that, I would like to turn the call over to Steve Cotton, CEO of OccuMetal. Steve, please go ahead.

Thank you, Glenn. Thank you, everybody, for joining us today. I'm going to start with slide one. And that is that we're leading a revolution in both the lead and lithium battery industries. And I'll talk about that throughout the presentation. Slide number two is our safe harbor, which I won't read to you, and you can refer to in the deck that we will have up on the website. Slide three, for those new to our story, and as a reminder to those who've been following Alpha Metals, I'd like to start with our mission. And that is to provide sustainable metal recycling for materials that are strategic to energy storage applications. What you see behind you is aqua refining in a still shot of what it looks like to see lead made one atom at a time. In our proven technology, aqua refining delivers raw materials right back into the manufacturing supply chain in a very clean way and an economical way that can also reduce over reliance on mining to meet demand with the recovery of these metals. Slide number four. This is AquaMetals at a glance. We have developed AquaRefining, which is a commercially ready, sustainable battery recycling technology. AquaRefining is very different than traditional battery recycling technologies in that it uses water instead of fire and organic acids that are biodegradable to create a 99.996% plus ultra-pure lead, which, as I mentioned before, we do one atom at a time, starting with creating a revolution for the $20 billion lead recycling industry. We're seeking to extend the aqua refining capabilities to lithium ion batteries and multi-metal recovery through intellectual property that we've already established with aqua refining and enhanced with our progress towards lithium recycling. strategic investment, and research and development on an ongoing basis. We believe that aqua refining is a transformative technology that truly benefits both the industries of batteries and battery recycling, as well as the earth itself. First off, the environmental emissions associated with aqua refining are vastly reduced compared to incumbent methodologies that use smelting. Second, worker safety is greatly improved because lead in air and other heat-related activities are vastly reduced. And we've seen deaths in the industry related to worker safety. And the good news with aqua refining is it eliminates many of those high-risk points for both exposure to industrial materials as well as heat-related accidents. Battery performance can improve greatly with aqua refining. And that's because when you make metals one atom at a time, you can make ultra pure metals that have very much less of the impurities and you can improve the battery performance and improve the battery life through novel ways of taking the link between battery recycling and battery manufacturing and linking that with an ultra pure metal product. The economics of aqua refining are becoming more and more compelling as we improve the aqua refining capabilities that we've demonstrated already commercially in 2018 and 2019. And when we work with our prospective clients for equipment supply and licensing and look at the entire ecosystem, it's a very compelling economic argument. Our ticker on NASDAQ is AQMS. We're headquartered in Tahoe, Reno in Nevada. We incorporated just in 2014 and we have 69.5 million shares outstanding. Cash on hand is 10.7 million as of June 30th report, and we are debt-free with a very strong balance sheet. Moving on to slide number five, I'm going to talk about recent highlights that the company has achieved just in this past quarter. First off, we announced this morning one of the most important announcements in the history of the company, and that is that we signed our first definitive agreement to license and deploy aqua refining technology and equipment in Taiwan. with Acme Metal Enterprise. What's exciting about that announcement is that is a region which has a very large market and a very rapid growth base. And our partner, Acme, is very excited about working with us to innovate aqua refining and deliver new ways of deploying aqua refining throughout the Asia-Pac region. We secondly secured key new aqua refining patent allowances. And that includes China, which is another patent that we've received just this past week, the world's largest and fastest growing lead market. This is very important in a technology and equipment supply and licensing environment. We're very proud of our IP portfolio, which I'll discuss more later. Third, we continued research and development and commercial development of aqua refining for lead, as well as for the lithium ion battery recycling efforts that we are making on a go-forward basis. There's more to come in that in the future. Next, we further advanced the Opry finding deployment discussions with several potential licensees, inclusive, of course, with the first definitive agreement that we announced, but our sales funnel remains robust and we're looking forward to communicating further news as news develops. Second to last bullet point is that we secured our final insurance payment, which we announced today, of $5.25 million. And that raises our total of collected insurance to $30.25 million, which is within the guidance that we've provided. And it puts the insurance collection efforts and related activities behind us. And we're very pleased with that news. And it very much strengthens our balance sheet and cash position, of course. Last bullet point. is we have been very busy removing several of the non-core assets from the aqua refinery, which is being converted to the LINECO, which stands for lithium nickel cobalt plant, to facilitate conversion of the aqua refinery to the LINECO operation of lithium ion recycling. And we've done that while continuing to operate the aqualizer program within a small section of that facility. And that has allowed us to further innovate and further improve the aqua refining program while we work on the handover of the plant to Lineco. So quite a bit of activity as it relates to those efforts. Moving on to slide number six, a little bit more about the ACME Metals Taiwan Agreement. We did sign the definitive agreement, which we previously announced a letter of intent within a short period of time from the letter of intent to the definitive agreement. which we believe is quite a vote of confidence from Acme in aqua refining technology. And it's for deployment of the technology in their facility that exists already in Taiwan. We have established Acme as the first licensee and the largest and fastest growing global lead market where they sit. We plan to begin shipping aqualizers soon for initial deployment and operations later this year. We also envision a great partnership not only with Acme, but with other global battery manufacturers to develop a second methodology to produce oxide that comes directly from the aqua refined material and streamlines the industry. You can see more information about that in our press release, which also references in a hyperlink a prior press release from January of this year that describes a bit more about the oxide direct from off-refining to battery manufacturing link. We have the potential to produce oxides using the only two industry standard processes available with our continuing efforts with ACME in Taiwan to add the second oxide development methodology. And this in sum creates a direct link from off-refining to battery manufacturing. And that allows us to improve the economics, drive emissions towards net zero, improve worker safety, and really streamline the link between battery recycling and battery manufacturing across the board. Slide number seven. This is our roadmap to revenue. AquaMetals has been in revenue before and we're pre-revenue and about to go into revenue again. You can see in the left of the slide that the company was founded in late 2014 and was in a pre-revenue mode with demo plant sales beginning in 2017. of the aqua refining facility that we built in the Tahoe-Reno Industrial Center, about 140,000 square feet. That plant entered into commercial demonstration production in 2018 and 2019, and we generated and sold 35,000 ingots of aqua refined lead in that timeframe and certified that lead as a North American supplier to the world's largest battery manufacturing company. We then went back into pre-revenue in 2020 to take the learnings from 2018-2019 version 1.0 and improve our aqualizer technology to become a product that we could transition towards revenue, not from the sales of demonstration product of lead metal, but rather the equipment and the technology. And that has culminated in our announcement this morning with that signed agreement with Acme Metal to deploy the aqua refining technologies in Taiwan, and we expect to reenter back into revenue as we get into 21 and onwards into 2022 and 2023. And as we get into 2022 and 2023, we expect revenues not only from the commercialization of off-refining technologies for lead recycling, but as we continue to develop and deploy pilot and then commercial systems with our partner Lineco and others, we expect for revenue for multi-metal recycling for the rapidly growing lithium ion battery recycling industry. Slide 8 summarizes our setup to where we are today, which includes over $200 million invested. And that gets us to the point where we have announced today the deployment of aqua refining equipment in a customer's facility. which we're very pleased with. And that is only possible with the robust IP portfolio that we've developed and are very proud of. And we're the only company with IP for clean lead recycling. And additional IP that we filed even for lithium ion recycling is a really important part of our IP portfolio that's growing. Since our last report, we are now up to 68 total patents that have been issued and allowed. As I mentioned before, we just recently received another allowance in China, which is a very important market for us for obvious reasons. We've got 49 additional patents that are pending applications. So we expect to see those issued patents and that portfolio grow quite a bit over time as we continue to prosecute those patents. And that new patent allowance for China, as I mentioned, is a really important step for the company as we go forward. So with that, I'm going to hand it over to Judd Merrill, our CFO, for a financial review. Judd.